The Vatican and Palestine signed an historic accord on the activities and status of the Catholic Church in the Occupied Territories of the West Bank, Gaza and East Jerusalem on Friday. The agreement is the first to explicitly refer to the Palestinian Authority (PA) as 'the State of Palestine’ following Vatican’s recognition of the Palestinian statehood in February 2013.

"In this context, it is my hope that the present agreement may in some way be a stimulus to bringing a definitive end to the long-standing Israeli-Palestinian conflict. I also hope that the much desired two-state solution may become a reality as soon as possible,” said Paul Gallagher, who signed the accord on behalf of the Holy See, Ma’an News Agencyreported.

"For the first time, the agreement includes an official recognition by the Holy See of Palestine as a State, in recognition of the right of the Palestinian people to self-determination, freedom and dignity in an independent state of their own, free from the shackles of occupation," Riad Al-Maliki, Palestinian Foreign Minister, told Ma’an News

Both the Vatican and Palestine hold non-member observer status with the UN, which gives them the right to attend all sessions of the UN General Assembly and the Security Council, yet not the right to vote.

The Palestinian observer status was recognised on November 29, 2012 with 138 votes in favour, 41 abstentions and 9 rejections coming from Israel, the United States, but also Canada and the Czech Republic.

The Israeli Foreign Ministry expressed its “disappointment” at the Vatican’s move and said it will, “study the agreement and consider its next steps accordingly,” the Times of Israelreported.

The agreement anchors the special status of historical Palestine as the “birthplace of Christianity.”

Emmanuel Nahshon, spokesman to the Israeli Foreign Ministry, said that the text “ignores the historic rights of the Jewish people in Jerusalem,” and, “harms the international effort to convince the PA to return to direct negotiations with Israel.”

No such accord that would address the status and rights of the Catholic Church has been signed between Israel and Vatican, despite them maintaining diplomatic relations since 1993.